Brady Construction Company contracted to build an apartment complex for a price

Question

Brady Construction Company contracted to build an apartment complex for a price of $6,300,000. Construction began in 2018 and was completed in 2020. The following is a series of independent situations, numbered 1 through 6, involving differing costs for the project. All costs are stated in thousands of dollars. Estimated Costs to Complete (As of the End of the Year) Costs Incurred During Year Situation 2018 2019 2020 2018 2019 2020 11,630 2,520 1,290 3,810 1,290 2 1,630 1,290 2,920 3,810 2,920 3 1,630 2,520 2,640 3,810 2,540 4 630 3,130 1,260 4,410 940 5 630 3,130 2,210 4,410 2,540- 6 630 3,130 3,100 5,855 2,870

Explanation / Answer

Solution:

Percentage of Completion method:

Completed contract method:

Computation of % of completion, revenue recognition and Gross Profit - Brady Construction Company (Situation 1) Year Actual cost incurred (A) Total cost incurred till date (B) Total estimated Cost ( C ) % of completion (D) (B/C) Contract Price
(E) Total Revenue to be recoganized (F) (E * D) Revenue for current period (G) Gross Profit (H) (G - A) 2018 $1,630,000 $1,630,000 $5,440,000 29.96% $6,300,000 $1,887,684 $1,887,684 $257,684 2019 $2,520,000 $4,150,000 $5,440,000 76.29% $6,300,000 $4,806,066 $2,918,382 $398,382 2020 $1,290,000 $5,440,000 $5,440,000 100.00% $6,300,000 $6,300,000 $1,493,934 $203,934

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.